Thaksin's New Tax Plan Targets Poverty in Thailand

[webfact]

FILE - Thailand's former Prime Minister Thaksin Shinawatra, left, with, his daughter Paetongtarn, arrives at Don Muang airport in Bangkok, Thailand, Tuesday, Aug. 22, 2023.(AP Photo/Sakchai Lalit, File)

 

Thaksin Shinawatra, the former Thai Prime Minister, is back in the news with a bold proposal: a negative income tax (NIT) aimed at reducing poverty and social inequality in Thailand. This latest plan could significantly alter the country's tax system.

 

The concept of NIT is not entirely new to Thailand. Over a decade ago, the Finance Ministry's Fiscal Policy Office (FPO) introduced a similar proposal. It was also included in the 12th National Economic and Social Development Plan (2017-2021) and the National Reform Plan under former PM Prayut Chan-o-cha. The Pheu Thai Party, to which Thaksin belongs, even highlighted a related idea in their most recent election campaign.

 

So, what exactly is NIT? It’s essentially a system where the government supplements the income of individuals earning below a certain threshold. As these individuals’ earnings grow, the government’s support gradually reduces and eventually stops. The aim is to incentivise work and integrate recipients into the tax system. Unlike traditional welfare, NIT requires recipients to be working and paying into the tax system.

 

Thaksin isn’t the first to propose something like this. The concept was first introduced by renowned economist Milton Friedman, who suggested it as a way to combat poverty without disrupting the free market. However, for NIT to work effectively in Thailand, the tax system will need substantial reforms.

 

Currently, Thai citizens earning as little as 60,000 baht a year must file taxes, but compliance is inconsistent. Under the NIT plan, everyone would be required to file taxes, even if they earn just one baht. This would require amending Section 56 of the Revenue Code.

One significant challenge is public acceptance. Connecting NIT to the tax system might cause confusion and concerns about increased taxation, making it a tough sell politically. Additionally, NIT excludes non-working individuals, suggesting the need for alternative support measures like vocational training.

 

The FPO sees NIT as part of a broader welfare reform strategy. This initiative aims to target support to those most in need while easing the financial strain of welfare payments on the government's budget. Existing programmes like the Universal Coverage scheme already demand substantial funding, and political promises of additional benefits only add to the pressure.

 

Thailand’s revenue collection is already strained, with tax cuts and a stagnant VAT rate contributing to a shrinking revenue base. The country has been running a budget deficit for two decades. Introducing NIT might be a risky but potentially game-changing move for Thailand.

 

Whether Thaksin's proposal will be the solution Thailand needs remains to be seen, but it undeniably opens up a significant conversation about the future of welfare and taxation in the country.

 

-- 2024-08-30

 

 

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[2baht]

11 minutes ago, webfact said:

Thaksin Shinawatra, the former Thai Prime Minister, is back in the news with a bold proposal: a negative income tax (NIT) aimed at reducing poverty and social inequality in Thailand. This latest plan could significantly alter the country's tax system

Perfect, who would understand poverty better than Thaksin Shinawatra and his poor clan!!!

[MalcolmB]

The reason Thaksin is so, or was, so popular with the masses is that he did lift millions out of poverty. 
Millions genuinely love him for it. 

Prayut and his gang had no idea about business and closed many beach and street vendors down, and stuffed things up. They didn’t create wealth for the people, they just took for themselves. 
 

Thaksin is the man.

[watchcat]

44 minutes ago, webfact said:

Thaksin Shinawatra, the former Thai Prime Minister, is back in the news with a bold proposal: a negative income tax (NIT) aimed at reducing poverty and social inequality in Thailand. This latest plan could significantly alter the country's tax system.

 

Why can't he just keep his mouth shut, and concentrate  to take care of his grandchildren as he said he'll be doing when he get out of the VIP hospital?

[Pouatchee]

sorry... which taxs_hi_ should be making these statements?

the puppet pm? or daddy puppet master?

 

why is he even talking?

[OneMoreFarang]

"Thaksin's New Tax Plan"

Arrest him for meddling as an outsider in Thai politics.

And arrest the PM for letting that outsider influence her or speak on her behalf.

It's time to get rid of all those Shinawatras. Let them live and die in the desert. 

[OneMoreFarang]

32 minutes ago, Pouatchee said:

why is he even talking?

Because nobody stops him.

It's time that that changes. 

[Xonax]

Since when is a convicted felon on probation allowed to involve in politics in Thailand?

[Ben Zioner]

So he reckons he can extort from us enough money to compensate Thai folks for the miserable salaries paid by the local bourgeoisie ?

[ikke1959]

Will not work as almost nobody in Thailand fills in a tax form..The Government has no clue who is doing what, for which salary, and how many savings and living where.. Solve these problems first and than start with new tax plans.. There are no tax plans yet only the few Thais fill in their tax form and most of them and especially the rich and superrich are having a lot of extra reductions already or paid their real tax off with an envelope.

[Hunz Kittisak]

2 hours ago, 2baht said:

Perfect, who would understand poverty better than Thaksin Shinawatra and his poor clan!!!

By your logic well off folks can’t formulate polices to combat poverty 

[lordgrinz]

Ummm....who exactly is the PM again? Did I miss something?

[phetphet]

If the recipients are on very low pay, I presume he is thinking their pay will grow faster than inflation to get them out of poverty. How will that happen?

 

Sure, a little extra from the gov't will help their living costs, but what is the mechanism to increase their living standard to a point they won't need the gov't money?

Will it be open to abuse?

[Hunz Kittisak]

16 minutes ago, phetphet said:

If the recipients are on very low pay, I presume he is thinking their pay will grow faster than inflation to get them out of poverty. How will that happen?

 

Sure, a little extra from the gov't will help their living costs, but what is the mechanism to increase their living standard to a point they won't need the gov't money?

Will it be open to abuse?

There’s no perfect policy but it’s a start and at least they are trying to do something. Better than what’s been happening with the junta for more than 10 years 

[black tabby12345]

A new source of additional wealth to the Already Super Rich 0.1%?

Due to the total lack of transparency in this kingdom, any increased tax revenue will straightly get into someone's pocket.

If they are serious, should tax those who dominate the most of the riches in this country first.

But Thaksin and his associates  never do that; always try to look themselves the Friend of the Poor at Someone Else's Expense.

Perfect example was the EGAT deregulation(only hitting the not-so-rich Thai middle income earners) during Thaksin administration before his expulsion by military coup.

 

 

 

[n00dle]

not even bothering with the pretense. I have not seen one report with a statement about  future policy in Thailand attributed to the sock puppet peatongtarn

 

[n00dle]

And anyone who thinks this is to benefit the poor, think again. It is about making tax filing mandatory for everyone who has never paid tax, a mind-boggling large percentage of the population.  

As Thailand moves from a cash to a prompt pay/mobile banking economy there will be nowhere to hide. I see it happening but am caught up in the convenience myself

 

[ThaiFelix]

3 hours ago, MalcolmB said:

The reason Thaksin is so, or was, so popular with the masses is that he did lift millions out of poverty. 
Millions genuinely love him for it. 

Prayut and his gang had no idea about business and closed many beach and street vendors down, and stuffed things up. They didn’t create wealth for the people, they just took for themselves. 
 

Thaksin is the man.

Bwahahahahaha! the man couldnt even lift his ego let alone the poor out of poverty.  He gave them 20 baht phone cards and it made him a hero among the poor in Isaan who the other political parties had ignored for years.  

[Pouatchee]

 

interesting part starts around 2 min 10. comment on taxs_t... so very true

[Ben Zioner]

26 minutes ago, Pouatchee said:

 

interesting part starts around 2 min 10. comment on taxs_t... so very true

Hmmmhh A wild pig metaphor for Thai people. Lucky his great grand father wasn't confronted to oversized lizards.

 

But what is he saying that I couldn't read in the article?

[n00dle]

38 minutes ago, ThaiFelix said:

Bwahahahahaha! the man couldnt even lift his ego let alone the poor out of poverty.  He gave them 20 baht phone cards and it made him a hero among the poor in Isaan who the other political parties had ignored for years.  

and now they ignore the south

[hotchilli]

4 hours ago, webfact said:

Unlike traditional welfare, NIT requires recipients to be working and paying into the tax system.

Get the minions working again.. no work no welfare?

1 hour ago, Xonax said:

Since when is a convicted felon on probation allowed to involve in politics in Thailand?

He's a free man, ex-con no longer on probation since he was pardoned.. 

[natway09]

I wonder just how many Thais are earning more than 60,000Bht & not filing a tax return ?

I know of hundreds

[LukKrueng]

7 hours ago, MalcolmB said:

The reason Thaksin is so, or was, so popular with the masses is that he did lift millions out of poverty. 
Millions genuinely love him for it. 

No, be didn't. But he's a great salesman, maybe the greatest in the world so he managed to get all those millions to think he was doing something for them.

In fact - he consolidated their loans and made it easier for them to borrow more money, not as a way to increase their income, but so they could buy cars, phones and other unnessesary objects that pushed them further into debts

[Skeptic7]

Yep addressing poverty alright...making the poor even poorer, with more hoops to jump thru to boot. 

[kimamey]

5 hours ago, Hunz Kittisak said:

There’s no perfect policy but it’s a start and at least they are trying to do something. Better than what’s been happening with the junta for more than 10 years 

The thing is it's not a new idea as it says in the OP. It also mentions it in regards to Prayut and PT in the last election. Then there's the problem of getting people to fill in tax returns, which they don't seem keen to do, plus ensuring the the tax office can cope with the extra paperwork. Possibly a good idea, from current and previous politicians and governments, but nobody has done anything about it yet. Anyone can suggest things. I could suggest it, or a universal basic income. Or maybe starting by making sure that high wealth individuals pay slightly more tax and the all the tax they owe by closing loopholes. Increase competition and the ability for smaller Thai companies to grow by controlling monopolies.

 

There are several ideas that I've put forward and I have others. They've all been thought of and proposed by other people. I've not actually done anything about them nor do I know how to overcome the possible difficulties in implementing them. Does that make me a possibility as a future politician. Of course it doesn't. Then again it seems you don't have to be a politician to give statements like this anyway.

[still kicking]

6 hours ago, ikke1959 said:

Will not work as almost nobody in Thailand fills in a tax form..The Government has no clue who is doing what, for which salary, and how many savings and living where.. Solve these problems first and than start with new tax plans.. There are no tax plans yet only the few Thais fill in their tax form and most of them and especially the rich and superrich are having a lot of extra reductions already or paid their real tax off with an envelope.

Yes I often wonder how do they calculate the unemployment rate, if you sell a bunch of bananas every day you are employed?

[hotchilli]

21 hours ago, webfact said:

Thaksin Shinawatra, the former Thai Prime Minister, is back in the news with a bold proposal: a negative income tax (NIT) aimed at reducing poverty and social inequality in Thailand. This latest plan could significantly alter the country's tax system.

The caring grandfather who just can't stay out of politics.

[Hunz Kittisak]

3 hours ago, hotchilli said:

The caring grandfather who just can't stay out of politics.

He can’t sit idle while the country is in crisis 

 

[jonclark]

On 8/30/2024 at 9:30 AM, MalcolmB said:

 

Thaksin is the man.

After the way he avoided jail i think calling him a man is a breach of the computer crimes act.